The effect of ambiguity in strategic environments: an experiment

Antonio Cabrales, Brañas, Pablo, Espinosa, María Paz and Diego Jorrat
Authors registered in the RePEc Author Service: Pablo Brañas-Garza

No 17584, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We experimentally study a game in which success requires a sufficient total contribution by members of a group. There are significant uncertainties surrounding the chance and the total effort required for success. A theoretical model with max-min preferences towards ambiguity predicts higher contributions under ambiguity than under risk. However, in a large representative sample of the Spanish population (1,500 participants) we find that the ATE of ambiguity on contributions is zero. The main significant interaction with the personal characteristics of the participants is with risk attitudes, and it increases contributions. This suggests that policymakers concerned with ambiguous problems (like climate change) do not need to worry excessively about ambiguity.

Date: 2022-10
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Working Paper: The Effect of Ambiguity in Strategic Environments: an Experiment (2022)
Working Paper: The effect of ambiguity in strategic environments: an experiment (2022)
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